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CON FERENCE PROCEEDINGS
Integrating U.S. Climate, Energy,
and Transportation Policies
Proceedings of Three Workshops
Liisa Ecola
t
Scott Hassell
t
Michael Toman
Sponsored by the McCormick Foundation
INFR AST R UC TURE, S A FE TY, A ND E NVI RONMENT
t
Martin Wachs
This research was sponsored by the McCormick Foundation and was conducted under
the auspices of the Environment, Energy, and Economic Development Program (EEED)
and the Transportation, Space, and Technology (TST) Program, both within RAND
Infrastructure, Safety, and Environment (ISE).
Library of Congress Cataloging-in-Publication Data
Integrating U.S. climate, energy, and transportation policies : proceedings of three workshops / [edited by]
Liisa Ecola ... [et al.].
p. cm.
Workshops from June 2008 sponsored by Environment, Energy, and Economic Development Program and
the Transportation, Space, and Technology Program, both within Rand Infrastructure, safety, and
Environment.
Includes bibliographical references.
ISBN 978-0-8330-4670-3 (pbk. : alk. paper)
1. Greenhouse gas mitigation—Government policy—United States—Congresses. 2. Climatic changes—
Research—Government policy—United States—Congresses. 3. Environmental policy—United States—
Congresses. 4. Energy policy—United States—Congresses. 5. Transportation—Environmental aspects—
Research—Government policy—United States—Congresses. 6. Transportation policy—United States—
Congresses. I. Ecola, Liisa. II. Rand Environment, Energy, and Economic Development (Program) III. Rand
Transportation, Space, and Technology (Program) IV. Title: Integrating US climate, energy, and transportation
policies.
TD885.5.G73I5678 2009
363.738'74—dc22
2009004356
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Summary
Climate change and the greenhouse gases that contribute to it are becoming a focus of growing
concern among policymakers and the broader public. The interconnection of climate change
mitigation policy with the key sectors of energy and transportation will be major challenges
facing the new president and his administration in the coming years. Although there are many
stakeholders who hold a wide range of perspectives on potential strategies to address climate
change, it is important that major policy players seek some level of general agreement on an
approach that encompasses both energy and transportation policy solutions. Otherwise, proposed climate change mitigation policies will engender dissent and risk failure.
In an effort to share different perspectives and identify common points of view that could
lead to new climate policy solutions, RAND convened three workshops—one each on climatechange policy, energy, and transportation—that brought together participants representing
multiple government agencies, industries, and advocacy and research organizations. The workshops, held at RAND’s Arlington, Virginia, offices in June 2008, featured discussion of various
issues related to climate change mitigation policy, including technological innovation; federal,
state, and local roles; potential legislative and regulatory solutions; international cooperation;
and public engagement.
Context for Making Climate Policy
The workshop participants generally agreed that the context for making policy on climate
issues can be summarized in four broad themes, described here.
Climate Change Is a Significant Problem Requiring Action on Many Fronts
The core scientific findings that support the occurrence of human-induced climate change are
no longer in doubt. The business and environmental communities agree that climate change is
a real and growing concern and that significant emissions reductions in greenhouse gases will
be needed to prevent harmful environmental change. Broad-based policies are needed soon,
and all major sectors of the economy should be involved because climate change cannot be
mitigated by responses in only a few sectors or industries.
Climate-Change Mitigation Is Intrinsically Linked to Other Important Public-Policy Issues
Because taking on climate-change mitigation will affect other policy areas, policymakers must
understand these interconnections and consequences. For example, it is very likely that some
transportation policies could help reduce traffic in addition to mitigating greenhouse-gas emisix
x
Integrating U.S. Climate, Energy, and Transportation Policies: Proceedings of Three Workshops
sions. However, in other cases, climate policy goals may conflict with other national goals, such
as greater energy security.
Policymakers and the Public Differ in Their Recognition of the Problem
Awareness of climate change and the need for urgency varies among actors. Some states are
more aggressive than the federal government, while other states are doing little. The general
public understands that climate change is a problem, but additional education may be necessary to generate public support for potential solutions.
Executive Leadership Is Needed to Make Progress on Climate Change
Top executive-branch officials at all levels of government—from the president to governors and
mayors—must take the lead on developing, building public support for, and implementing
climate-change policies. Such leadership will be necessary to help guide constructive policy
debates with legislative bodies at all levels.
Policies to Confront Climate Change
Workshop participants identified and debated the advantages and drawbacks of specific
approaches to confronting climate change.
Market-Based Approaches
Market-based approaches are seen as a necessary component for a climate policy to gain acceptance and succeed in reducing emissions. Two types of market-based approaches were discussed: (1) a cap-and-trade system, in which the government sets an emissions limit and issues
tradable permits for the amount of emissions that can be produced by an emitter, and (2) a
carbon tax, which sets a price for emissions but imposes no limit on the amount of emissions
an emitter can produce. While many economists and some industry leaders believe that a
carbon tax would be more economically efficient, most experts view cap and trade as more
politically feasible and still effective.
At the climate workshop, participants debated a range of issues relating to cap-and-trade
policy, including how to distribute the permits and what to do with the substantial revenues
collected if the government sold some permits. While participants in the energy workshop
agreed that market-based approaches would be a key strategy for reducing energy emissions in
general, participants in the transportation workshop generally felt that a market-based approach
was necessary but not sufficient to reduce emissions from transportation.
Direct Regulations
Regulations require individuals and businesses to reduce certain types of emissions in certain
ways, with costs borne by the regulated entities. Current regulations with implications for
greenhouse gases include the following:
t Corporate Average Fuel Economy (CAFE) standards, which require manufacturers to
produce vehicles that use fuel more efficiently
t energy-efficiency standards for both residential- and commercial-use appliances
Summary
xi
t building codes that regulate types and efficiencies of heating and cooling systems, lighting, windows, and so forth
t renewable portfolio standards, which require electricity companies to use a minimum
percentage of renewable energy sources to produce electricity.
Not surprisingly, there was a great deal of debate about the most effective types of regulation
as well as which level of government—federal or state—should set regulatory standards. For
example, industry tends to favor nationwide standards, while some states would like to continue enacting state-specific regulations.
Technology Policies
Although all participants agreed that many technology innovations will be needed to reduce
emissions, they expressed a range of views about the impact of new technology as well as
policies designed to promote research, development, demonstration, and deployment of innovations designed to reduce emissions. While some believed that new technology would ultimately be the principal way to achieve greenhouse-gas reductions, others thought the promise
of technology had been overhyped because significant behavioral and infrastructure changes
would also be needed to make new technology widely available and affordable. However, there
was wide agreement that work should continue on promising technologies, such as wind and
solar power, carbon capture and storage, biofuels, and alternative vehicle technologies, such as
plug-in hybrids.
In addition, some discussed an appropriate federal role in identifying and funding promising climate-change innovations and technologies. While participants thought that the government should not be choosing winners and losers, they also agreed that, if the public sector
provides financial incentives for private-sector innovation, the incentives need to be available
consistently in order to prevent boom-and-bust cycles for certain technologies.
Behavioral Change
Behavioral change can take many forms, including driving less, purchasing more energyefficient appliances and vehicles, using less electricity, and switching to alternative sources of
electricity. Small changes in individual and business behavior can add up to large decreases in
collective greenhouse-gas emissions. Although some behavior change may occur voluntarily
through increased public awareness of climate change, government policy incentives seek to
encourage such change. Market-based approaches are one form of incentive; direct financial
benefits, such as tax credits, represent another category. Participants generally agreed that there
are significant obstacles to achieving major emissions reductions, especially in the nearer term.
Energy-saving investments often require high up-front costs, while the energy savings can be
small and spread over many years, and, for many businesses, energy costs are not a major determinant of their overall costs.
Another key obstacle is that existing land-use patterns make it difficult for Americans to
reduce their driving. Changing this may require a variety of approaches, including regulatory
reform of land-use patterns and congestion pricing, to reduce vehicle miles traveled. Although
emissions have been reduced in the past through technological innovations, efforts to address
climate change by reducing emissions will also require Americans to drive less.